Sec. 4. Special disaster-related rules for use of retirement funds
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Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified disaster distribution. For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified disaster distributions for any taxable year shall not exceed the excess (if any) of— $100,000, over the aggregate amounts treated as qualified disaster distributions received by such individual for all prior taxable years. If a distribution to an individual would (without regard to subparagraph (A)) be a qualified disaster distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a qualified disaster distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000.
For purposes of subparagraph (B), the term controlled group means any group treated as a single employer under subsection (b), (c), (m), or
(o)of section 414 of such Code. The limitation of subparagraph
(A)shall be applied separately with respect to distributions made with respect to each qualified disaster. Any individual who receives a qualified disaster distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of such Code, as the case may be. For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph
(A)with respect to a qualified disaster distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified disaster distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph
(A)with respect to a qualified disaster distribution from an individual retirement plan, then, to the extent of the amount of the contribution, the qualified disaster distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. For purposes of this subsection— Except as provided in paragraph (2), the term qualified disaster distribution means any distribution from an eligible retirement plan made— on or after the first day of the incident period of a qualified disaster and before the date which is 180 days after the date of the enactment of this Act, and to an individual whose principal place of abode at any time during the incident period of such qualified disaster is located in the qualified disaster area with respect to such qualified disaster and who has sustained an economic loss by reason of such qualified disaster. The term eligible retirement plan shall have the meaning given such term by section 402(c)(8)(B) of such Code. The term individual retirement plan shall have the meaning given such term by section 7701(a)(37) of such Code. 3 -year period In the case of any qualified disaster distribution, unless the taxpayer elects not to have this paragraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable-year period beginning with such taxable year. For purposes of subparagraph (A), rules similar to the rules of subparagraph
(E)of section 408A(d)(3) of such Code shall apply. For purposes of sections 401(a)(31), 402(f), and 3405 of such Code, qualified disaster distributions shall not be treated as eligible rollover distributions. For purposes of the Internal Revenue Code of 1986, a qualified disaster distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) of such Code and section 8433(h)(1) of title 5, United States Code, and, in the case of a money purchase pension plan, a qualified disaster distribution which is an in-service withdrawal shall be treated as meeting the distribution rules of section 401(a) of the Internal Revenue Code of 1986. Any individual who received a qualified distribution may, during the applicable period, make one or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in section 402(c)(8)(B) of such Code) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3) of such Code, as the case may be. Rules similar to the rules of subparagraphs
(B)and
(C)of subsection (a)(3) shall apply for purposes of this subsection. For purposes of this subsection, the term qualified distribution means any distribution— described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(i)(V), 403(b)(11)(B), or 72(t)(2)(F) of such Code, which was to be used to purchase or construct a principal residence in a qualified disaster area, but which was not so used on account of the qualified disaster with respect to such area, and which was received during the period beginning on the date which is 180 days before the first day of the incident period of such qualified disaster and ending on the date which is 30 days after the last day of such incident period. For purposes of this subsection, the term applicable period means, in the case of a principal residence in a qualified disaster area with respect to any qualified disaster, the period beginning on the first day of the incident period of such qualified disaster and ending on the date which is 180 days after the date of the enactment of this Act. In the case of any loan from a qualified employer plan (as defined under section 72(p)(4) of such Code) to a qualified individual made during the 180-day period beginning on the date of the enactment of this Act— clause
(i)of section 72(p)(2)(A) of such Code shall be applied by substituting $100,000 for $50,000 , and clause
(ii)of such section shall be applied by substituting the present value of the nonforfeitable accrued benefit of the employee under the plan for one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan . In the case of a qualified individual (with respect to any qualified disaster) with an outstanding loan (on or after the first day of the incident period of such qualified disaster) from a qualified employer plan (as defined in section 72(p)(4) of such Code)— if the due date pursuant to subparagraph
(B)or
(C)of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the first day of the incident period of such qualified disaster and ending on the date which is 180 days after the last day of such incident period, such due date shall be delayed for one year (or, if later, until the date which is 180 days after the date of the enactment of this Act), any subsequent repayments with respect to any such loan shall be appropriately adjusted to reflect the delay in the due date under subparagraph
(A)and any interest accruing during such delay, and in determining the 5-year period and the term of a loan under subparagraph
(B)or
(C)of section 72(p)(2) of such Code, the period described in subparagraph
(A)of this paragraph shall not be disregarded. For purposes of this subsection, the term qualified individual means any individual— whose principal place of abode at any time during the incident period of any qualified disaster is located in the qualified disaster area with respect to such qualified disaster, and who has sustained an economic loss by reason of such qualified disaster. If this subsection applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i). This subsection shall apply to any amendment to any plan or annuity contract which is made— pursuant to any provision of this section, or pursuant to any regulation issued by the Secretary of the Treasury (or his delegate) or the Secretary of Labor under any provision of this section, and on or before the last day of the first plan year beginning on or after January 1, 2027, or such later date as the Secretary may prescribe. In the case of a governmental plan (as defined in section 414(d) of such Code), clause
(ii)shall be applied by substituting the date which is two years after the date otherwise applied under clause (ii). This subsection shall not apply to any amendment unless— during the period— beginning on the date that this section or the regulation described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect, and such plan or contract amendment applies retroactively for such period.